Wednesday, January 11, 2012

An interesting experiment about appetite for risk related to gender was carried out by two economists at the University of Essex, Alison Booth and Patrick Nolen. The particular conclusions drown by this research will appear on Next month's edition of the Economic Journal.

In the experiment, the economists created a questionaire of multiple questions that measured the degree of risk taking capacity in a universe of 260 male and female pupils from eight state single-sex and coeducational schools in Essex and Suffolk. The questions in general, involved choices between 2 options: a real-stakes lottery option and a sure bet option

At a first glance, the final results and conclusions of the research showed a well known fact and predictable trend: that males tend to have a greater appetite for risk than females. However, the surprising finding was the difference related to the risk taking capacity in the group of females pupils. Here, the variable "school type" resulted in a significant difference: while girls at single-sex schools were willing to invest more in a hypothetical risky investment, coed female prefered the options which represented a sure bet.

According to the researchers, this difference can be explained by the degree of inhibition which both type of pupils normally deal with. In an all-female environment, inhibitions related to the "appropriate behavior" and cultural driven norms are genearlly reduced. This lack of inhibition would result in a greater risk taking capacity.

The importance of the experiment's findings rely on the implications theses results would bring on the emerging field of experimental economics and would also explain why women who studied in single sex schools tend to be more successful in the world of business. In conclusion, If you want your daughter to be a high-flying businesswoman or banker, send her to a single-sex school. Very interesting.